Samir, developer of RatateMe, Nokemote ant other good application, just released YTPlayer which is still in beta status. The freeware can be download here and gives you the opportunity to playback Youtube videos on your mobile. You have to move the *swf file to C:\Others and open it with Flash Lite 3 which you can download here.
After entered a search term, selected a connection you can browse through the video content and select one by pressing the middle key. Bear in mind that YTPlayer is still in beta, so there could be some bugs. What do you think about it? Do we need a YouTube client or do we need a browser which supports flash videos?